Henry Gabay, the founder of the now-defunct London asset management firm Duet Group, was sentenced to four years and ten months imprisonment for his role in orchestrating a Cum-Ex tax scheme that incurred Germany up to $100 million in losses.
His aggrieved tax evasion conviction was delivered by a German court, which also found his ex-partner at Duet, Osman Semerci, guilty. Semerci, formerly a rising star at Merrill Lynch & Co, was handed a lighter sentence of three years and six months.
Notably, these convictions mark the first time high-profile individuals from London’s financial community have been penalised for involvement in ‘Cum-Ex’ schemes. Gabay, despite the conviction, continues to maintain his innocence.
‘Cum-Ex’ schemes are a controversial form of tax trading roundly criticized for their part in exploiting loopholes to ‘double-dip’ into treasury coffers through duplicated dividend tax reclaims. Given the significant public and industry interest this case sparked, the implications of this verdict should not be undervalued.
For more detailed information pertaining to this case, please refer to the original Bloomberg Law article.